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HGTV Effect

Nov. 15, 2011
Categorized in: Sellers

Sellers and real estate agents are increasingly feeling frustrated by something that's been dubbed the "HGTV effect". In a nutshell, potential buyers who have watched way, way too much HGTV not only don't want to buy anything that's not pristine, upgraded, perfect, they don't even want to look at it. Even the Washington Post has written about this.

There is almost no market any more for fixxer uppers. The market left for those is investors looking to give you a lowball price that is likely to make the average seller gag.

If you haven't redone the kitchen complete with granite countertops, hardwood floors (or ceramic tile) and the newest and best appliances, forget it.

The dilemna for a seller is that if you pay to upgrade your house you will NOT get that money back. Yes, you'll get some of the investment back. But you won't come anywhere near getting it all back. On the other hand, at least you'll get people to look at your house!

My advice, start upgrading now even if you're not going to sell for awhile. At least you can get some enjoyment out of the upgrades!

Oh, and if you're a buyer and want a deal, look for the properties that need upgrading and be ready to do the work yourself!

Rappahannock Market Update

Sep. 27, 2011
Categorized in: Rappahannock County

It's been awhile since we've taken a look at the stats for individual markets. So we'll start with the smallest market today, Rappahannock, and then do Culpeper, Fauquier and Prince William over the next week.

The October, 2011 report for Rappahannock County shows mostly discouraging news. The total number of Active Listings is, in my mind, the most discouraging number with a total of 108 properties currently looking for buyers. Of the 6 properties sold last month, one third of them were on the market for over a year. The dollar volume of sales is down 58% year over year. The average sold price is down 44% year over year. Average days on market for the county is now 221, up 118% from where we were in October of 2010. The average list price and average sold price are both down over 40%. There's not much in the way of bright spots there.

The sole bit of good news I can offer is that, as usual in Rappahannock, the volumes are so tiny that it's almost impossible to draw many conclusions from a single month's data. Even year over year, volumes are just too small to compare two months and come to any relevant conclusions.

What I can tell you is that if you look at longer term trends, meaning several years worth of data, you see that average monthly sales are up from the depths of the recession. Now that only means that 6-8 houses sell in a given month rather than 3-4. But for those 3 or 4 homeowners, it makes a difference. Days on market remains high, but not as high as it's been. And, where once we were looking at around 3 years of inventory, at the current pace of sales it's more like 18 months.

There is no way to look at the data and suggest prices are better or firmer, although I suspect they're relatively stable.

If you're selling your home in Rappahannock County, make sure it's in excellent condition. If it's not, be prepared to discount it steeply and still wait a long time for the right buyer.

 

Where's Your Buyer

Sep. 26, 2011
Categorized in: Sellers

My colleague in Charlottesville, Jim Duncan, has a post on houses that don't sell, just because their buyer isn't currently in the market.

It's one reason why so many people want to be "the third real estate agent." (Old real estate joke. You're going to have to ask me privately!)

I think Jim's got it right, as usual. But it's a hard conversation to have with a seller. It's human nature to reject what you don't want to hear and I suspect most sellers will send you packing the first time they hear this. (And, maybe a few more times!)

Flying Off the Shelves

Jul. 12, 2011
Categorized in: Buyers

It's been a long time since I've seen my buyers having so much trouble finding houses to buy. In some areas inventory (high quality, well-priced inventory) disappears almost as fast as it hits the market. The western side of Prince William county, including Gainesville, Bristow and Haymarket fit that description. The southeastern side of the county, not so much.

But even in places like Bealeton and Remington, in the lower price ranges there is very limited inventory for sale and the good stuff goes fast.

There is an increasingly steady drumbeat of press articles around this amazing buying opportunity, that might be part of it.

Meanwhile, the many reasons sellers don't want to sell if they don't have to haven't changed, which continues to limit inventory.

So, is it a great time to buy? Interest rates are low, prices remain low (although beginning to edge upwards a slight bit) and those are good things. The lack of inventory and continued economic uncertainty would suggest continuing to proceed with caution. Every situation is different. But if you're staying put over 5 years, I like your odds of at least breaking even when you sell.

Why Sellers Won't Sell

Mar. 1, 2011
Categorized in: Sellers

How people think about real estate, economics and what's going on in their own personal financial situation has a lot more to do with the current state of our economy than most of us realize.

This story from the Planet Money team illustrates that nicely. Sellers can't bear to lower the price, often even if they still get a very nice profit.

Are you holding on? What for?

Painfully Funny

Aug. 2, 2010
Categorized in: Business of Real Estate

This YouTube video has enough truth to be painful whether you're a buyer, seller, real estate agent, lender or even a taxpayer. And if you're waiting on a loan modification, you may want to self-medicate before watching!

 

Who Ya Gonna Call?

Jul. 29, 2010
Categorized in: Foreclosures/Short Sales

We had a shock recently when a home in our neighborhood here in Amissville went up for sale as a foreclosure. It's not all that common around here and the price was jaw-droppingly low.

South Poes Road

Given that we have almost identically sized acreages I needed to know more. Was the number I carry around in my head on what our home is worth way off?

So, I went to take a look.

The moral of this story is, you should do the same thing. Clients worry that they're bothering their real estate agent if they ask to go see a house for sale in the neighborhood. Trust me, if your agent's worth a dime they're going to be happy to get that call. Some day you may want to sell your home and the more educated you are about the local market the easier those conversations are going to be for your agent.

I'd argue all of my clients ought to be calling me at least once a year to see something for sale in the neighborhood.

And, how did it work out for us? The house has no central air and needs lots of work. I don't think that number in my head is wildly crazy. And, apparently the market thinks that house was priced pretty competitively as well since there were multiple offers almost immediately.

I'm feeling a lot calmer now!

Photos You Don't Want in the MLS

Apr. 14, 2010
Categorized in: Sellers

The #1 way buyers find a house to buy is the internet.

The #1 factor in a buyer choosing to look at your house is the photos.

Is this what you want representing your house?

 I get a little crazy when I see these photos. (By the way, every photo of this listing was atrocious!)

If you're interviewing a listing agent, ask to see photos of their current/most recent listings. Not just the front photo, but interior as well. Ask how many photos they'll upload. (Hint: if it's less than 10 and you have a single family home, ask why!)

 

March Local Market Numbers

Apr. 13, 2010
Categorized in: Local Market Conditions

It's been a few months since I've written about the overall market stats for the area. So, let's see what's changed.

We'll talk about Rappahannock first for a change. How does it compare to a year ago? 86 listings now compared to 76 then. 6 sales in March 2010 compared to 3 last year at the same time.

Note: Remember, real estate is seasonal and year over year numbers are a much smarter comparison than month to month.

The one Rappahannock statistic that jumps out is the number of new contracts in March. There were 8. That's the highest number of new contracts in one month since August, 2006.

Culpeper has 433 active listings compared to 464 last year at this time. While sales in other counties jumped in March after a couple of slow months, March still looks pretty flat in Culpeper. But the median sales price is up almost 10% year over year. That's 2 months in a row that have shown price increases. If you look over a longer time horizon, it's certainly easy to make the case that prices remain flat to slightly higher. The number of contracts ratified in March is down, year over year, but up significantly month over month. Last year at this time there was an increase in contracts from February to March. As always, I'm reluctant to speculate on what these tiny data points mean, other than to say, stay tuned.

Fauquier County also shows declining inventory, 516 now vs. 556 a year ago. Sales are 73 in March of 2010, a significant increase from the 43 in March of 2009. In fact, you can pick just about any metric you want in Fauquier, including price, and it's up. The absorption rate would indicate a very balanced market. That's slightly misleading since there's little inventory available at the lower price ranges.

Prince William County continues to be the place where the buyers are lining up to buy. As an example, a listing came on the market in Gainesville this morning and by this evening when I tried to take my clients to show it, I was turned away and told it was already under contract. Inventory has dropped year over year from 3079 a year ago to 2595 now. Sales have dropped though, from 750 a year ago to 559. I believe that has more to do with a lack of properties in the lower price ranges rather than a lack of interest by buyers. And inventory is coming on the market at a slower pace. Last year in March 1219 new properties were listed. In March 2010 only 964 properties came on the market. Prices reflect the shortage of inventory. Prices have been climbing in Prince William County for months now.

It's a great time to be a buyer in our area if you don't mind bidding wars and competing against cash offers! It's a great time to be a seller if you are not expecting prices at 2005 levels!

 

 

No Apologies Necessary

Jan. 18, 2010
Categorized in: Foreclosures/Short Sales

I got a call this week from a former client about selling their home. They owe the bank more than the home is worth so this will be a short sale.

The amazing thing is that this client apologized to me for asking me to take on a short sale. Wow!

I love my clients and I love how they look out for me. It's a humbling thing.

But in this particular instance, no apology is necessary! In this market, if I didn't work on short sales, I'd have very little work! It's very rare for me to get a call to list a house that isn't a short sale. And, it's rare to work with a buyer who isn't buying either a foreclosure or a short sale.

So, please, when you call me about your short sale listing, even if it's just to pick my brain, don't apologize. If it wasn't for short sales I'd have to find something else to do for a living! (Do you remember that old song "If it weren't for bad luck I'd have no luck at all")

Think of me as Short Sales R Us!

Seriously, I'm well suited for short sales. I've been told I've got the patience of a saint and that's true. (I think it's in my genes!) Patience may well be the number one attribute any agent needs for dealing with banks in a short sale! I'm a great listener and most sellers who are going through a short sale need a good listener. And, I'm cool in a crisis, good at keeping my head when things get emotional.

So, to all the sellers who have contacted me about a short sale, thank you! And, to those of you who will call me this year, thanks to you too! Keep those phone calls coming!

Short Sale Approval Info

Nov. 4, 2009
Categorized in: Foreclosures/Short Sales

Been trying to get an answer from the banks for weeks or months on whether or not your short sale has been approved?

Are you a buyer trying to buy a short sale? Or a seller desperately waiting for that "yes" or "no" that will make all the difference?

Maybe you're an agent tearing your hair out over the hours you spend on hold with banks.

There's help at hand, finally! No matter where you live in Virginia, there's information here for you.

http://hasmyshortsalebeenapprovedyet.com

This site will get you the straight scoop on whether or not your short sale has been approved in seconds.

 

The Appraisal Mess

Aug. 21, 2009
Categorized in: Business of Real Estate

If you're involved in the real estate business or are a buyer or seller right now you probably are well aware of the appraisal mess. If you haven't gotten a taste of this yet, here's what all the fuss is about.

In an effort to make appraisals more objective and keep lenders from twisting the arms of appraisers to get higher values, new rules were rolled out this year from Fannie Mae and Freddie Mac. Instead of a local lender calling a local appraiser, they must now call a clearinghouse who will then subcontract to an appraiser.

While the idea of keeping arms length relationship sounds good, there have been some big hiccups with this new process. Appraisers are coming from far, far away to appraise in neighborhoods they know nothing about. Just today I met an appraiser at a listing I have in Culpeper. The appraiser drove several hours from Maryland to do the appraisal.

This has resulted in wildly inaccurate appraisals. And it's slowed the process down, because there's now an extra layer there.

The other thing an extra layer does is add extra cost. The new clearinghouses want to make money off of the appraisal too. So they raise the fees they charge, increasing the cost of the appraisal to the buyer. But at the same time they've lowered what they pay the actual appraiser. Guess how many of the best appraisers want to work for these clearinghouses?

There's a movement in Congress right now to suspend these rules temporarily until some kind of fix can be found for the more egregious problems. Meanwhile, if you're waiting on an appraisal, whether you're a seller or a buyer, be prepared for bad news! And, remember that if there are issues with the appraisal, there are also potential remedies.

Short Sale Warning

Mar. 27, 2009
Categorized in: Foreclosures/Short Sales

I just got back from a class on short sales. Things keep changing and you have to try to keep up with the latest trends.

Here's the biggest take away as far as recent changes to the short sale process go.

Banks are much less inclined to forgive the debt on a short sale. This is particularly true of the second mortgage holder. And, they're willing to hold the deal hostage at the last minute in order to get their pound of flesh.

It brings up the question of whether a short sale, deed in lieu of foreclosure or foreclosure is better for the homeowner. And, I'm going to tell you that if you're a seller wondering that you shouldn't be asking me.

If you're not talking to an attorney who can protect your interests, with this much money at stake, I think you're making a mistake.

A couple of years ago, most debt was wiped out completely on a short sale. So, if you got one done then, be very, very glad!

The other take away is how difficult these things still are. I've seen press reports that they're getting easier, banks are getting more reasonable or smarter or more efficient. Don't believe it!

On a short sale, if you go from contract to settlement in anything less than 120 days, consider yourself lucky!

If you're a buyer you're going to have to weigh your ability to wait that long against the incredible deals that are available on short sales. The truth is that most buyers are deciding short sales won't work for them. That makes the deals better for those few willing to endure the pain of the process.

The Slow Down

Mar. 26, 2009
Categorized in: Mortgages

There's a new roadblock on the way to getting to settlement these days.

The number of people refinancing has skyrocketed. And, as a result banks and some of the people they rely on are overwhelmed. Appraisers are overbooked. Lenders are pushing out settlement dates to be sure they can get everything through underwriting.

There are still settlements happening in 30 days, but it's getting a lot tougher.

Interest rates won't stay at this rate forever. In fact, interest rates in the mortgage markets will jump before a lot of other interest rates do. Mortgage interest rates are very sensitive to inflation worries. With all the money being pumped into the economy, I suspect this is a pretty small window of opportunity before rates start to move back up.

But for right now, if you're buying a house talk to your lender about whether 30 days is doable. And, if you're a seller, don't be surprised to see delays on the way to settlement.

Signs a Seller Will Love!

Mar. 23, 2009
Categorized in: Business of Real Estate

I'm in love with these new signs being used by my friend, Jim Duncan with Nest Realty in Charlottesville.

He wonders in his blog post about how long it will be until they're copied. I don't know the answer in Charlottesville, but I hope it won't be long before I'll be copying him here!

If you were selling, how appealing would this be to you?

If you are a potential buyer, how helpful would such signs be to you?

February Market Numbers

Mar. 10, 2009
Categorized in: Local Market Conditions

Final February numbers became available today. There are no startling changes to current trends. Inventory continues to decline. Sales continue to look pretty strong.

Culpeper's absorption rate indicates that current inventory would be entirely absorbed in just under 13 months. That's the best that number's looked in a very long time.  In fact, for the first time in several years Culpeper's absorption rate is higher than Fauquier County's rate. Fauquier County's absorption rate shows it would take almost 16 months to get rid of current inventory. Prince William County stays at an astonishingly low 5 months. And, Rappahannock continues to move along at its own pace!

The biggest surprise to me in this month's data is that we did not see the big jump in new listings that I expected we'd see. Typically this is when you see sellers trying to get a jump on the spring market and inventory starts to climb. And we did see small increases in the number of new listings in a couple of counties. But they were very small increases and sales increased enough that there was no impact to overall inventory.

Sometimes what I see on a particular day is more striking than numbers. Today I was out showing properties in Prince William County. I showed four properties. The first one had already gotten one offer in today. At another property we were greeted by an agent and her clients who informed us that the bank had already accepted their offer. At the third a property that had just gone on the market this week already had cards from 21 agents that had shown it. And, our showing was interrupted by another couple right behind us.

The only property of the four that didn't appear to be overrun with potential buyers was one that clearly had water issues and possibly even foundation issues in the basement.

If you're looking at properties in Prince William County that are under $350K we're back to multiple offers, bidding wars and potential buyers tripping over each other in houses.

Overall, the market seems healthier and I'm pretty optimistic that the number of sales overall will be substantially above 2008. I still don't anticipate a big jump in prices. However, prices in Prince William are likely to increase this year if current trends continue.

Sellers have reason for optimism. Buyers still have a great market, but there's definitely a sense of urgency if you're buying in Prince William County.

 

Pro Bono

Jan. 25, 2009
Categorized in: Sellers

After hearing some examples around the country of other real estate professionals pitching in to help some distressed sellers, I've been moved to do the same. I won't make a huge difference in our local real estate market. But perhaps I can make a huge difference in the life of a few local families.

So, effective immediately I'm going to be taking on one pro bono client each quarter. This will be a seller, someone with their back up against the wall. While I can waive my fee, I can't do the same for the cooperating broker. So this is not a transaction with no commission. But I'll waive my half.

If you know someone who's stuck, who feels hopeless, have them get in touch with me. This offer will only apply to owner-occupied properties, not investment homes. And, unfortunately, I'll have to limit it to one per quarter as I still need to make a living!

But I look forward to the opportunity to help!

 

VA Compromise Sale

Jan. 2, 2009
Categorized in: Sellers

Thanks to Lenn Harley at Homefinders.com for bringing this to my attention.

For those homeowners with a VA loan who find that they owe more than what they can sell the home for, the VA has what's called a Compromise Sale.

From their web site:

If the borrower is unable to sell the property for an amount that is greater than or equal to what he/she owes on the loan, including closing costs, VA may pay a “compromise claim” for the difference in order to allow the private sale to go through. The borrower can sell the property to a buyer who gets his/her own financing or to a buyer who wants to assume the loan. However, with a compromise assumption, the lender does have to agree to have the amount of its guaranty reduced by the amount of the claim payment.

 This program does not automatically relieve the borrower of all obligation for the shortfall. However, they may be able to wrap the deficiency, closing cost assistance for the buyer and the real estate commission into a loan at a very favorable interest rate.

There are detailed instructions for both the homeowner and the real estate agent on the web site. It may not be the perfect solution, but it'll be the help some families need in order to move on.

 

Chemistry Matters

Jan. 1, 2009
Categorized in: Finding the Right Agent

This is another in a continuing, occasional series on how to choose a real estate agent.

Previous posts have focused on more concrete, measurable things. But I think the softer side of this equation also merits some focus.

Perhaps one of the most important elements in choosing a real estate agent is to get one with whom you feel comfortable. You need to "click". The process of buying or selling a home is stressful, even under the best of conditions. And, heaven knows our current market, even if you're buying, can be tough. You want that interaction to be as comfortable as possible.

I know that "comfortable" is going to strike many of you as too soft and mushy. So, let me see if I can help you with a little better definition.

You want someone you can communicate with directly and honestly. You don't want to worry about hurting their feelings. You don't want to worry that they'll dismiss your fears and worries without listening. This stuff is important and you need to be able to talk openly what you're worrying about, where you have misgivings. If things things stay bottled up you can make a mistake because you didn't ask the right question. And, all those unsaid things can definitely poison a relationship!

There are people out there who take stress in, amplify it, and pass it on to everyone they meet. Then there are others who are good at taking the stress, absorbing it and killing it. They pass along their calm to those they come into contact with. You definitely want the latter as your real estate agent. When the little road bumps occur you don't need someone telling you the sky is falling!

Comfortable also means you have a good fit in terms of communication styles. If you love e-mail and hate the phone make sure your agent feels the same way. (Or at least is willing to modify her style for you!)  And, if you want long, chatty phone conversations and all you ever get are e-mails, there's probably a communications mis-match. It's a good idea to indicate early in a relationship how you like to communicate and making sure that works for everyone.

The soft stuff really does matter. Pay attention to this and the rest of the real estate experience will be much better!

 

Rappahannock Price Conundrum

Dec. 23, 2008
Categorized in: Rappahannock County

It can be difficult to figure out what the market is doing in Rappahannock. With 2-3 sales a month, most months, it's difficult to discern trends. And, given the enormous price ranges found in properties in the county, any snapshot is sure to lead to incorrect conclusions.

But I've had a couple of conversations this week with property owners in Rappahannock County that had me wondering about pricing overall. In several instances property owners said they knew their properties were overpriced but they had no intention of lowering the price. They said they weren't "desperate" and could wait out any temporary market downturn.

And, of course, they're no doubt correct. While most homes are both a home and an asset for most families. There are a lot of property owners in Rappahannock for whom the property is more heavily weighted towards asset. It's easier to wait this out if you don't have to sell your property here in order to move on somewhere else.

And, the dollar value of sales stayed relatively consistent this year. A total of almost $16 million sold in 2007. In 2008 that total was almost $14.5 million. What was down significantly were the number of transactions. There were 42 in 2007. It looks like we'll finish with about 30 total sales in 2008.

Meanwhile, inventory has risen pretty dramatically. There were 67 properties on the market at the end of 2007. Today there are about 98, an increase of about 30%. We hit a high at the end of October with 103 properties for sale.

Rappahannock took longer to feel the effects of this downturn. And, in a normal economy with a normal real estate slump, there may not have been much of an impact at all here. But the economic fiasco we find ourselves in nationally has not spared the residents of Rappahannock. There have been foreclosures here as well, with more likely to come. And there's an increasingly long list of people who really do want to sell their properties but can't (at least at their current price).

So, how long does the stalemate last? How long are sellers willing or able to wait for the market to recover. In the region overall I believe it could be 5-10 years before we see property values anywhere near what we saw, say, in 2005. Even if you're not "desperate" how long do you want to hold on?

2009 promises to be an interesting year in Rappahannock real estate! What do you think lies ahead?

 

Piedmont Real Estate Blog

Blog by Julie Emery
Amissville, Virginia

An ongoing dialog on real estate news, opinion and trends in Northern Virginia and the greater Piedmont area. Julie is an Associate Broker at Frankly Real Estate Inc, 6304 Crossroads Circle, Ste 102, Falls Church, VA 22044

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